The European Commission announced that it has opened a formal investigation into some of the e-book practices of Amazon. Specifically, the EC said in its announcement, it will look into the so-called Most Favored Nation clauses that require publishers to inform Amazon if they are offering better or alternative e-book terms to the retailer.
In its announcement, the EC stressed that the investigation will focus on clauses ”which seem to shield Amazon from competition from other e-book distributors, such as clauses granting it: the right to be informed of more favorable or alternative terms offered to its competitors; and/or the right to terms and conditions at least as good as those offered to its competitors.”
MFN clauses, of course, were one of the violations that Apple and five American publishers were charged with in the e-book price-fixing case in the U.S.
Noting that the use of e-books has “surged” in popularity in Europe in recent years, and that Amazon is the largest distributor of e-books in Europe, the EC said the initial phase of its investigation will focus on Amazon’s practices on e-books published in English and German.
EU commissioner in charge of competition policy Margrethe Vestager said in a statement: "Amazon has developed a successful business that offers consumers a comprehensive service, including for e-books. Our investigation does not call that into question. However, it is my duty to make sure that Amazon's arrangements with publishers are not harmful to consumers, by preventing other e-book distributors from innovating and competing effectively with Amazon. Our investigation will show if such concerns are justified."
There is no timetable for the EC to finish its investigation and it observed that the length of the probe depends on a number of factors “including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defense.”
In its statement, Amazon said that it "is confident that our agreements with publishers are legal and in the best interests of readers. We look forward to demonstrating this to the Commission as we cooperate fully during this process.”